Globally, some 1.4bn adults are unbanked. Many studies have shown that banking the unbanked – that is to say, expanding access to financial services – can help reduce poverty by making it easier to save, borrow, and transfer money, not to mention start a business.
“Financial inclusion matters and is the cornerstone of development,” summarizes the World Bank in its most recent global banking survey, Findex 2021.
The good news is that more and more people are gaining access to bank accounts everywhere. The bad news, however, is that there are still populations that need more help. Strikingly, in Africa, more than 40% of adults remain unbanked. That compares with 26% in Latin America and just 6% in the United States.
What can be done on the ground in Africa, where 90% of financial transactions are still cash-based? How can we help people access the money they need for emergencies, education, healthcare, and entrepreneurship? Innovative solutions from fintech startups and mobile payments platforms are helping, yet more remains to be done.
In this context, we at the Absa Bank team in Botswana find a traditional, homegrown idea offers a fresh beacon of hope. “Community group savings” have served as lifelines for the un- and underbanked for years now.
In a nutshell, community group savings operate on a simple yet effective concept. Community members voluntarily come together to form a group and contribute a fixed amount of money regularly. This creates a shared pool of funds, which is made available to members on a rotational basis. Recently, group savings have gained traction in the face of increasing demand for financing options.
Our joint project in Botswana
To explain the origin of the project, a bit of history is in order. It was about seven years ago that the United Kingdom-based Barclays Bank, which used to be Absa’s majority shareholder, announced that it was refocusing on its core UK and US markets. This signified an end to its 11-year partnership with Absa, during which the two groups had integrated systems, processes, and policies.
Around 2016’s divestment, Absa was faced with the challenge of fundamentally redesigning its identity and strategy. Our organization took time to rethink its core values and ways of doing business as an integrated pan-African organization. This is how Absa’s conception of Africanacity was born. Absa defines Africanacity as the distinctly African ability to get things done with tenacity, ingenuity, creativity, audacity, and positivity. With this in mind, developing Absa’s talent became a top priority of its cultural transformation to meet changing needs.
So, Absa turned to IMD to shape its learning and development initiatives, targeting people at many levels of Absa’s organization. The resulting learning journeys included customized programs and corporate entrepreneurship projects enriched with coaching, mentoring, and career-development sessions.